Thank you,
Mr. Chairman, and members of the committee, for inviting me to appear before
you today and to share some thoughts on the plan to create a new department of
homeland security.

I will
address my comments to three points. First, the general question of creating
this new department; second, how intelligence collection needs can best be
accomplished; third, how best to deal with intelligence analysis in support of
this department.

Why a Consolidation of
Border and Security Responsibilities is Imperative

The
creation of a cabinet level department with full responsibility for control of
US borders is long over due. A "border management agency" was
actually proposed by the Carter administration but met great resistance within
the executive branch at the time. The issue has been periodically raised since
then, especially where it concerns drug trafficking. I wrote a short op-ed
piece in US News & World Report in 1988, not long after I retired,
calling for such a department because from the point of view of providing
intelligence to support the war on drugs, I had seen interagency competition
and the lack of secure communications create all kinds of difficulties. Too
often we had good intelligence but ineffective action because of fragmented
arrangements within the federal government charged with border control
responsibilities. There were also serious limits on the capacities of local
law enforcement officials for using intelligence. At the time, I likened the
drug war to a football game in which the drug traffickers were an NFL team and
government a division III college team. The fragmentation of responsibilities
among agencies – at least nine with border responsibilities being spread among
five different cabinet departments – made it impossible to defend US federal
borders effectively.

Several
years later, when the National Guard and the Marine Corps began to supplement
the Border Patrol along our border with Mexico to deal with illegal
immigration, the fragmentation problem was made worse. Now we face the
terrorist threat, giving border control the greatest urgency. Thus the
arguments for creating this new department concern not just terrorism but also
immigration, drugs, and other contraband in trade. I mention these other
purposes because they are too often lost in today’s public debate on the
matter.

I do
not see, therefore, how any serious arguments can be made against a major
re-organization of the kind the administration is now proposing. It is long
overdue. We are living with organizations that date back to the 18th
and 19th centuries when the federal bureaucracy grew haphazardly,
often in response to parochial political interest before genuine needs. The
resulting potpourri of fragmented bureaucracies is not surprising, but it is
astonishing that we have failed for the last half a century to modernize the
federal organization for dealing with the plethora of dysfunctions caused by
the fragmentation.

Those
who warn that reorganization will not fix the problems are right.
Reorganization alone cannot insure improvement, but it will make it possible.
As the organizational arrangements stand today, the problems cannot be fixed.
Do the critics prefer to keep it impossible to improve the situation? I was
involved in the reorganization that created FEMA during the Carter
administration. The same arguments were made, and for several years, various
parts of FEMA did not work together very well, but over time, it has developed
a respectable record of performance, a record that the pre-FEMA organizations
could not have matched.

As a
final point in favor of reorganization, changing technologies and changing
markets have caused more than a few major business firms in the United States
to fail. Others have restructured to accommodate the changes and have
prospered as a result. Given the dramatic changes in technology for
communications and information management over the past several decades, we
should assume a priori that we need a major restructuring of both the
bureaucracies controlling US borders and of organizational arrangements for
domestic security against terrorist attacks. In other words, the burden should
be on those who oppose the new department to prove why it is not needed.

Intelligence Collection to
Support Homeland Security

In
considering intelligence support to this new department, we should break it
into two parts: 1) collection of intelligence and 2) analysis of intelligence
for decision makers. I shall comment first on collection, then analysis.

The
Intelligence Community has been slowly changing toward a system of national
managers for the main intelligence collection disciplines, the three being
signals (SIGINT), imagery (IMINT), and human intelligence (HUMINT) collection.
A fourth, counterintelligence, also needs national management but remains
fragmented beyond anyone's control at the national level.

Many cabinet
departments and scores of sub-cabinet agencies now receive intelligence from
NSA, NIMA, and CIA's Directorate of Operations. If user agencies maintain
properly secured communications and storage facilities as well as cleared
personnel to handle SIGINT, they are regularly provided with support. I am not
sure how far that kind of distribution system has evolved for IMINT and HUMINT,
but the technology for it is has been around for at least two decades. There
is no reason, therefore, that the Homeland Security Department cannot receive
collected intelligence from all three disciplines directly from the components
of the Intelligence Community as it is now constituted. The State Department,
for example, depends on this method for meeting its intelligence needs. So do
several other departments and agencies.

It is not
enough, however, that the SIGINT, IMINT, and HUMINT are delivered to a single
office in the headquarters of the Homeland Security Department. Several of its
sub-departments and agencies will also need to receive relevant intelligence
directly, often on a "time sensitive" basis, for their own analysis
and. When the Intelligence Community agencies supply intelligence to a
major command within the Department of Defense, for example, the Central
Command (CENTCOM), they do not dump it all at CENTCOM headquarters. Much of it
is sent directly to tactical units in the field. The new Homeland Security
Department will need to develop analogous systems of direct intelligence
distribution based on the particular needs of the various organizations within
the department. They will have to have secure communications and storage
facilities, and they must provide "cleared" personnel to receive and
process it at every level of the department where time-sensitive intelligence
is used.

To use a
familiar metaphor – news services – the Security Department's various subunits
will have to subscribe to intelligence collection services just like customers
subscribe to AP, UPI, Reuters, CNN, FOX, and others. The Intelligence Community
will need to make more progress in getting the CIA/DO and NIMA to act as news
services. NSA is more advanced in this approach for historical and technical
reasons, dating back to World War II when distribution of SIGINT (such as
"ULTRA") was compartmented and handled in special communications
channels. Advances in imagining technologies and broadband communications have
made the same approach feasible for IMINT. The technology to distribute HUMINT
is simple enough, but the security problems are different. Still, the general
approach can be adapted for all three collection disciplines.

Another kind
of intelligence collection will be especially important within this new
department. It is analogous to what the military calls
"reconnaissance" or "tactical" intelligence reporting by
non-intelligence units. Rifle platoons, for example, report all kinds of enemy
actions and locations as a result of their direct encounters with enemy
forces. The results of combat actions immediately become
"intelligence" although they are not collected and reported by
intelligence personnel. Air force pilots and ship crews at sea do analogous
collecting and reporting of enemy activities and capabilities.

In
the Homeland Security Department, the same kind of tactical reporting by all
subunits and field operators will be extremely important where useful
information can be observed. This will be the responsibility of the
department's internal intelligence processes. Learning that all intelligence
does not come from the Intelligence Community will be critically important for
the department's success.

I have not
yet mentioned counterintelligence (CI) support, which is terribly important for
homeland security. To be clear about CI, it is like ordinary intelligence
except that it focuses only on hostile intelligence services, their collection
capabilities, agents, knowledge of the United States, etc. Because terrorists
have much in common with spies, operating clandestinely, CI must also include
counter-terrorism (CT) intelligence, both domestically and abroad. Until CI is
better organized within the Intelligence Community, CI support to homeland
security will be poor. If a "National CI Service" were created to
provide "national management" for all CI – and counter-terrorist intelligence
– removing it from the FBI, then CI/CT could be handled just like SIGINT,
IMINT, and HUMINT. Putting the FBI within the new department would not provide
better CI/CT, but rather worse. Moreover, it would make CI/CT cooperation with
the CIA, Army, Navy, and Air Force virtually impossible.

If such a
change were made, relieving the FBI of CI/CT responsibilities, it and all local
law enforcement agencies would still need to share and distribute information
about all criminal activities that bear on terrorists and their activities.
The new National Counterintelligence Service would takeover the task of
collecting and producing CI/CT both abroad and within the United States.
Coming under the Director of Central Intelligence, it would have the same,
perhaps more, oversight than the rest of the Intelligence Community, and its
budget and tasking priorities would be provided by the DCI in line with the
intelligence requirements that he gathers each year from all agencies within
the executive branch needing intelligence support.

Intelligence Analysis for
Homeland Security

Thus far I
have discussed intelligence collection and distribution. "Analysis"
and "production" of so-called "finished" intelligence, or
"all-source" intelligence, are different from "collection"
of intelligence. Normally done by different people from intelligence
"collectors," they consist of the processes of integrating
intelligence, making sense of it, and using it to answer questions that users
of intelligence have for their particular operational and policy goals. I
emphasize this difference between collection and analysis because the public
debate about intelligence support for the new Homeland Security Department
often confuses the two as one and the same. They are not.

The new
department must have its own analysis and production capabilities. They will
have to give their special collection requirements to the Intelligence
Community agencies according to the DCI's guidance, and those agencies must
collect and sort information to answer the requirements. The Homeland Security
intelligence analysts will have to put it all together from the various reports
supplied by the collection agencies. Because these analysts will be within the
Homeland Security Department, they will be properly located to know its
intelligence needs and how to shape them, both to steer collection efforts and
to produce answers that are timely and truly needed.

Within the
department, there will undoubtedly have to be a decentralized system of
analysis in some cases, centralized in others. With modern communications,
however, the mix of both approaches is easy to establish. For example, central
data bases can be built, allowing dispersed access and use in decentralized
analysis units.

What
I am suggesting here, of course, is the intelligence analysis model found in
the military services. Every operational command has a staff intelligence
section, which can request and receive SIGINT, HUMINT, IMINT, and CI. This
intelligence staff section is responsible to the operations staff section for
finished intelligence analysis. At the joint level, this section is known as
the J-2 and the J-3 is the operations section. At the corps and division
levels, we find the G-2 supporting the G-3, and so on, down to S-2s and S-3s in
brigades and battalions. In the air force and navy, analogous staff
intelligence sections are found with different names.

We
can call this the "distributed processing" model of intelligence as
opposed to the "central processing" model. The latter model is
analogous to a big mainframe computer that serves many users who have only
"dumb" terminals to provide access to the central processor. The
distributed processing model is analogous to small microprocessors in PCs and
laptop computers located in many analytic units, widely dispersed with
different needs and demands, performing analysis tailored for local use. The
distributed processing model removes the queues, the lines in which users may
have to wait for responses. And it emphasizes particularizing analysis for the
familiar user immediately at hand, not a faceless one far away. Only analysis
done locally, where the intelligence officers are in immediate contact with
operators who use intelligence to make decisions, can accurately perceive what
kinds of intelligence analysis is useful. A large intelligence analysis center
far away from the users will never have the sensitivity to local operations to
provide effective support. This has always been the weakness of much of the
all-source intelligence produced by CIA/DI and DIA. Both can produce useful
products for some purposes, but they cannot provide comprehensive and
"time sensitive" support to all users within a single department,
much less the entire government.

When we
understand the difference between 1) intelligence collection and 2)
intelligence analysis and production, it becomes clear why it makes no sense to
put collection agencies from the Intelligence Community inside of the Homeland
Security Department. That will makes things worse, not better, for intelligence
support, unless the Intelligence Community agencies work only for that
department. In that case, additional and similar agencies would have to be
created to prove support to the military services, the State Department, and
dozens of other executive branch intelligence users.

Another
kind of problem arises, however. How do the intelligence collectors – SIGINT,
IMINT, HUMINT, and CI – decide whom to give priority? The Defense Department? The
State Department? Homeland Security? Treasury? The President has to set the
priorities, and his executive for doing that is the Director of Central
Intelligence.

Like any
other resource, intelligence is costly and scarce. All users cannot have all
they want all the time. Their requirements have to be prioritized, giving some
preference over others as situations and needs change. This prioritization
task is not new. The Defense Department has dealt with it for a long time,
quite successfully in most cases. Among departments, especially its largest
users, State and Defense, the DCI has also developed a reasonably effective
record of handling the prioritization task according to the demands of the
department secretaries and the Joint Chiefs of Staff. The new Homeland
Security Department should look to that experience in handling its own internal
priorities and learning how to get the most from the Intelligence Community's
collection agencies and centralized analysis and data bases.

Conclusion

The
complexities surrounding both the practical matter of creating a new Homeland
Security Department and of providing it with adequate intelligence support are
enormous. In my remarks I have merely sketched the broad outlines, but I hope
that they explain these conclusions:

First,
the wisdom of creating the new department is beyond doubt. It will not be
easy, and mistakes will be made in the process, but they can be ironed out by
trial and error. This reorganization process is absolutely essential if
there is to be any serious improvement in the control of our borders and in
defense against terrorist operations within the United States.

Second,
terrorism is not the only reason for creating this new department. It has long
been needed for dealing with immigration, drugs, illegal trade, and several
lesser matters. If it is properly organized and tasked, it can help reduce the
rising transaction costs these issues are placing on the US economy.

Third,
intelligence support for the new department is not a matter of putting the FBI,
CIA, or some other intelligence organization within its domain. It is a matter
of creating its own intelligence analysis elements and insuring that they have
access to the major collection capabilities in the Intelligence Community.
That approach works well for the Intelligence Community's support to many
cabinet departments and lesser agencies today.

There
is one exception. The Intelligence Community is poorly organized to provide
"counterintelligence" (CI). CI must also take the lead in providing
counter-terrorism intelligence (CT) as well. And its collection and production
cannot be the responsibility of criminal law enforcement agencies, not just in
the case of the FBI but also in the military services. As the Intelligence
Community is now organized, it simply cannot provide a comprehensive CI and CT
picture to anyone, not to mention the Homeland Security Department.